The Shanghai-based Shenneng Co. , Ltd. has become the first publicly listed Chinese firm to repurchase part of its state-owned shares.

The company has repurchased and written off one billion state- owned shares held by the Shenneng (group) Co., Ltd. at 2.51 yuan per share. Consequently, the equity of the firm has been reduced from 2.6 billion shares to 1.6 billion shares, while its registered capital has dropped from 2.6 billion yuan to 1.6 billion yuan.

Non-circulating state-owned shares now account for 68 percent of its total equity, compared with 80 percent before the repurchase. Public circulating shares accounts for 15 percent compared to a previous 10 percent.

The repurchase was carried out after being approved by the Ministry of Finance, the China Securities Regulatory Commission and shareholders.

Company officials said that the repurchase complies with Corporate Law equity structure provisions and paves the way for further improvement of its management.

The repurchase of state-owned shares has a healthy impact on optimizing equity structure of China's publicly-listed firms, securities analysts said.